KUALA LUMPUR (Nov 15): Fertiliser manufacturer Cropmate Bhd has unveiled the prospectus for its ACE Market initial public offering (IPO) to raise up to RM52 million, as part of its plan to purchase new factories and expand operations.
The IPO, priced at 20 sen per share, entails the issuance of 210 million new shares and an offer for sale of 50 million existing shares, the prospectus showed. All in all, the listing would offer investors up to 35% in the company.
Application for the IPO closes on Nov 22, with the company’s listing scheduled for Dec 5.
Cropmate mainly involves in the formulation and blending of conventional and specialty fertilisers, as well as trading of straight fertilisers based in Selangor. The company currently has four blending-compacting production lines with an annual capacity of up to 214,000 tonnes of fertilisers.
At the offer price of 20 sen, Cropmate would have a market capitalisation of RM147.6 million, valuing the company at about 14 times 2023’s earnings. The company made a profit after tax of RM10.05 million for the financial year ended Dec 31, 2023.
“As the first-ever pure-play fertiliser company to be listed on Bursa Malaysia, this IPO represents our commitment to enhancing agricultural productivity and sustainability in Malaysia,” Cropmate managing director Lee Chin Yok said during the prospectus launch here.
The sale of new shares will raise RM42 million, of which RM17.1 million will be allocated for working capital to support its operations in providing fertilisers for durian orchards and oil palm plantations, the prospectus showed.
Cropmate also set aside RM16.7 million to partly finance the purchase considerations of factories where the company’s operations are located. The remaining funds are for capital expenditure, including the setting up of a research laboratory, and to defray listing expenses.
The offer-for-sale, meanwhile, will gross RM10 million and accrue entirely to the selling shareholders — managing director Lee Chin Yok and his sons Lee Cheng Seng and Lee Cheng Fei, who are both executive directors; as well as to substantial shareholders Lau Sam Siong and Datuk Tan Chew Chin.
Hong Leong Investment Bank is the principal adviser, sponsor, underwriter and bookrunner for the IPO.